Another taxpayer-funded energy company files for bankruptcy

NOW PLAYING
Another taxpayer backed energy company goes bankrupt
A cutting-edge battery maker that received millions from taxpayers has become the latest government-backed energy firm to file for bankruptcy – reviving the controversy over how stimulus dollars were spent under the last administration.

Seven years after Aquion Energy received a $5.2 million stimulus-tied grant from the federal government, the Pennsylvania company on Wednesday filed for Chapter 11 bankruptcy.

“Creating a new electrochemistry and an associated battery platform at commercial scale is extremely complex, time-consuming, and very capital intensive. Despite our best efforts to fund the company and continue to fuel our growth, the Company has been unable to raise the growth capital needed to continue operating as a going concern,” Scott Pearson, Aquion's outgoing CEO, said in a press release.

The company, which is now seeking a buyer, produces batteries to store solar and renewable energy. It had been touted as a rising star in the energy storage business, even attracting investment from Microsoft founder Bill Gates and millions more in state funding.

In January, the company was named “the North American Company of the Year Award” at the annual Cleantech Forum in San Francisco, which “focuses on emerging trends, leading innovation companies, and key players in sustainable innovation.”

Suzanne Roski, the company's chief restructuring officer, did not respond to a request for comment from Fox News.

Critics say Aquion’s fate is further evidence the government should not be in the business of picking winners and losers.

“Who thinks the Department of Energy has the expertise to predict which companies will succeed for fail in the marketplace, particularly in an industry that is not only dependent upon government subsidies, but is highly unpredictable?” said William Yeatman, a senior fellow at the Competitive Enterprise Institute.

The company grew out of the work of Jay Whitacre, an engineering professor at Carnegie Mellon University. He developed a successful design for a storage battery that would use only non-toxic, non-flammable chemicals, rather than the more flammable lithium batteries.

Days before the company filed for Chapter 11, Whitacre was named the new director of the Wilton E. Scott Institute for Energy Innovation at Carnegie Mellon.

Aquion was awarded its federal grant in 2010. The Department of Energy issued the funding to build a large-scale battery manufacturing plant that would be located on the site of a former Sony facility in Westmoreland County, Pennsylvania.

Private investors flocked to the project.

According to the Pittsburgh Tribune-Review, Aquion raised about $190 million from investors, including from Ray Lane, a former president of Oracle.

They began low-volume production in the summer of 2011, broke ground on full-scale manufacturing facility in 2012 and have been shipping commercially since mid-2014, according to its website.

Two years later, Aquion Energy received $16.6 million in funds from the state of Pennsylvania, including two alternative clean energy loans totaling $5 million, to develop.

As part of the agreement, Aquion committed to create 341 new jobs and retain 70 existing employees, according to Heidi Havens, communications director for Pennsylvania’s Department of Community and Economic Development (DCED).

In February 2016, the company requested a two-year extension to create the jobs promised. At that time, only 50 jobs had been created.

The Westmoreland facility has since halted operations.

“This announcement is a reminder of the critical need to ensure that taxpayer dollars for economic development projects are spent appropriately and that intended outcomes are met,” Havens said in an email to Fox News.